To Meet Consumer Demands, Automotive Marketing Goes Vertical
This post is the latest in our “Vertical Challenge” series. It’s our editorial focus for the month of October, including topics like vertical-specific strategies and the pros and cons of zeroing in on local business categories. See the rest of the series here.
The U.S. automotive industry is expected to spend nearly $16 billion on digital advertising this year, accounting for 12% of total U.S. digital ad spend. While the lion’s share of automotive ad spending still happens on Google and Facebook, dealers are taking an increasingly verticalized approach to online marketing as they search for smarter ways to maintain and gain an advantage in the digital space.
For auto dealers, gaining a competitive advantage in digital means adapting to the preferred ways customers now search and shop for cars and accepting that the industry itself has changed in the last decade. Online reviews, business listings, and social media all play a much more important role in the research that goes into a customer’s decision about where to buy or service a vehicle now than a decade ago, and dealers that can adapt to those changes stand to reap the greatest rewards.
“Buying a vehicle is the second largest purchase decision an individual can make, so marketing to car shoppers is a much longer process. Longer buying windows, coupled with offline sales transactions, also makes marketing attribution more complicated,” explains Marc Cannon, chief marketing officer at AutoNation, an auto retailer with a footprint across 325 locations in 16 states. “Our data stack investments are helping to provide more insight throughout the customer journey, so we make more informed marketing decisions.”
While customer feedback is coming in from every direction, the automotive industry has done a better job of funneling reviews into vertical-specific platforms than some other industries. Large auto retailers like AutoNation are making major data stack investments, while others are working to improve their online ratings and reviews by engaging more frequently on sites like Facebook and Yelp as well as on automotive-specific platforms like Cars.com and Edmunds.
Dealerships that actively work to manage online customer sentiment by listening to and acting on online consumer feedback are being rewarded with more reviews and engagement, according to the 2019 Automotive Reputation Report, put out by Reputation.com. The report found that the automotive industry has the highest response rate to negative feedback (69%) compared to other industries.
Looking at the websites most frequently used to find listings information for auto dealers, the report found that Google was far and away the leader, however vertical-specific sites like Cars.com, Car Gurus, and Edmunds all factored prominently in the results as well.
Dealers tend to have more favorable ratings on vertical-specific websites, like Cars.com and Edmunds, than they do on Google or Facebook. According to an analysis in Reputation.com’s report, star ratings for automotive dealerships have been rising across the board over the last several years, thanks in part to the increased presence of local dealers on popular digital platforms.
Large auto retailers, like AutoNation, have the advantage of being able to access data to make more strategic decisions in real-time. Cannon says those sorts of data-driven decisions are used to, for example, create more personalized marketing messages. That kind of response is necessary if dealers want to adapt to the new digital environment they’re finding themselves in. Consumers have higher expectations than ever before, Cannon says, and auto retailers have to make the car buying and servicing experience faster, easier, and less stressful if they expect to keep pace.
Whether a company like AutoNation decides to work with a vertical-specific marketing platform (like Cars.com) or a more general-use platform (like Facebook or Yelp) depends on the marketing objectives, says Cannon.
“We always review both vertical-specific and general-purpose platforms when trying to solve a problem,” he says. “Marketing platforms are a critical, but expensive investment so a thoughtful consideration to all options will help maximize business outcomes.”
Stephanie Miles is a senior editor at Street Fight.